The DCF (Discounted Cash Flow) Valuation model is perhaps the single most important financial tool that financial professionals can have. This model is great in theory and practice, but traditionally performed in excel, it can be quite tedious and cumbersome in function at times. Fortunately, using Python, we can automate many of these valuation steps and then also take it a step further and create a Monte Carlo Simulation function which will be used to visualize distributions of potential DCF outcomes.

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import numpy as np
import pandas as pd
import matplotlib.pyplot as plt
%matplotlib inline

The first thing we need is a projection of our annual sales. We will create a DataFrame for six years into the future, with a starting sales figure which would theoretically be carried over from the previous financial statements.

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